Josemaria

Core Assets Quick Summary

Project NameLos HeladosJosemaria
Interest62.2% (37.8% Pan Pacific)
as of December 31, 2017
100%
LocationChile (Andes near border)Argentina (Andes near border)
Elevation4,500 m4,300 m
CommodityCopper/Gold/SilverCopper/Gold/Silver
TypePorphyryPorphyry
StatusPEA CompletePEA Complete
Development OptionsStand-alone or combined development with JosemariaStand-alone or combined development with Los Helados
PEABased on combined development called “Project Constellation”. Please see technical report for full details
MiningOpen pit at Josemaria followed by block cave underground mine at Los Helados.The two deposits are located approximately 10 km apart, and material from both deposits will be processed at a centralized facility.
Pre-Tax NPV (8%) & IRR$4.43 billion NPV, 20.7% IRR 
After-Tax NPV (8%) & IRR$2.61 billion NPV, 16.6% IRR 
Payback Period3.6 years 
Metals Prices Assumed$3.00/lb Cu, $1,275/oz Au, $20.00/oz Ag 
Initial Capital Expenditures$3.08 billion 
LOM C-1 Cash Costs (net of by-product credits)$1.05/lb Cu payable 
Nominal Mill Capacity150,000 t/d 
Mine Life48 Years 
Average Metal ProductionLife of Mine
150,000 t Cu
180,000 oz Au
1,180,000 oz Ag
First 5 years
185,000 t Cu
345,000 oz Au
1,310,000 oz Ag
LOM Average Process Recovery88.3% Cu, 72.7% Au, 61.4% Ag 

Josemaria Executive Summary

Ownership

NGEx owns a 100% interest in the Josemaria deposit.

Location

The Josemaría deposit is located in the Andes Mountains of  San Juan Province, The project is located about 10km from the Chilean border and the shortest access to the Project is from Copiapó Chile, a driving distance of about 170 km, or three hours.  Access from Argentina is by major provincial highways and dirt roads from the city of San Juan, Argentina.  Copiapó has a population of approximately 150,000 people, an airport with daily scheduled flights to Santiago and Antofagasta, and companies that offer mining and exploration services.  While farther away, San Juan, Argentina, is also a major mining centre with good mining services available.

The climate in the Project area is dry to arid and the temperatures are moderate to cold.  Annual precipitation is about 250 mm, with snow at higher altitudes in the winter.  Exploration fieldwork is generally carried out from mid-October to early May.  It is anticipated that mining operations will be conducted year-round.

The Los Helados Deposit also held by NGEx is located 10 km to the northwest in Chile.

History

Josemaria is a grass roots discovery made by NGEx and there is no record of significant exploration activity prior to NGEx’s interest.

Geology

Josemaría is a copper-gold (Cu-Au) porphyry system. 

The copper-gold mineralization at Josemaría is mostly hosted by a Miocene porphyry system which forms an elongated body with minimum dimensions of 800 to 900 m north-south, 600 to 700 m east-west and 600 to 700 m vertically. The porphyry has been dated at approximately 24.7 Ma. The main hypogene Cu and Au mineralization is associated with the upper parts of the potassic alteration zone. Chalcopyrite and pyrite plus minor bornite are disseminated through the potassic zone. Quartz–magnetite ± chalcopyrite veining occurs through much of the main mineralized zone, as discrete veins and locally as a more intense stockwork.

A well-developed leached cap overlies the entire Josemaría deposit, related to oxidation at and below the present topographical surface. There have been at least two main stages of supergene copper enrichment at Josemaría: the first occurring prior to the deposition of the post-mineral volcanic rocks and a second phase occurring at the present-day erosional surface. Along the Josemaría structural corridor, a distinct inverted bell-shaped concentration of secondary copper mineralization forms the richest part of the enrichment blanket.

The Josemaría deposit remains open to the south, beneath a thickening cover of post-mineral volcanic rocks, and also at depth.

Exploration

Work programs conducted by NGEx include geological mapping; soil, rock-chip, and talus sampling; a number of geophysical surveys including induced polarization (IP)–resistivity, magnetometer, and Mount Isa Mine’s Distributed Acquisition System methodology (MIMDAS) surveys; reverse circulation (RC) and core drilling, and Mineral Resource estimation.  A number of environmental baseline studies have been undertaken. 

Drilling

Nine drilling campaigns have been carried out at the Josemaría deposit, from 2003 to 2014.  Drilling at the Josemaría deposit to date totals 61,100 m in 142 drill holes, of which 48 holes (17,535 m) are RC holes, and 94 holes (43,565 m) are core holes.  Core recovery from holes drilled at Josemaría between 2011 and 2014 averages 94%. 

Resource Estimate

Link to Resource Estimate

Metallurgical Testwork

A two phase metallurgical test work program was conducted at SGS Minerals S.A. (SGS) laboratories in Santiago, Chile under the supervision of Amec Foster Wheeler. 

The main activities completed during the metallurgical test program were:

  • Sample selection for the metallurgical test programs
  • Chemical characterization including mineralogical analysis
  • Physical characterization
  • Gold recovery using gravity processing techniques
  • Leaching of the Cu and Au oxide ore types
  • Copper, gold and silver recovery using conventional sulphide flotation practices
  • Settling testwork.

Copper recoveries obtained during the test work range from 81.1% to 96.7%, Au and Ag recoveries were fixed for each lithology.  Fixed Au recoveries range from 59.2% to 72.6%; fixed Ag recoveries range from 52.9% to 74.9%.

Mining and Processing

The PEA contemplates that Josemaría would be mined using conventional open pit methods.  Initial development would target the highest-grade portion of the Josemaría deposit, which is a near-surface zone of supergene-enriched mineralization. Overall loss and dilution was estimated to be less than 1%, and has been incorporated into the block model.  The final strip ratio for the designed pit is 0.98:1. 

From the open pit, mill feed material would be trucked to a primary crusher, crushed, and then sent to the process plant.  The base case comminution circuit design considers a conventional high pressure grind roll (HPGR) crushing circuit followed by conventional ball mill grinding.  The circuit was designed to process 150 kt/d of Josemaría material. Conventional sulphide flotation will follow the comminution stage.  This is expected to produce a gold and silver-rich copper concentrate containing a life-of-mine average of 29.0% Cu, 10.4 g/t Au and 70.3 g/t Ag. The metallurgical  testwork completed to date also indicates that the concentrate product will be low in deleterious elements.  Groundwater for the process plant would be supplied from a nearby basin through an 8 km pipeline to the plant site, and power would be supplied via 250 km of power line construction to connect to the Argentina national grid. 

Concentrates would be trucked from the plant to the port of Caldera in Chile.  The port is about 380 km by road from the Josemaría plant site.

Project Constellation

The Company evaluated the potential to develop Josemaria and Los  together as one project- Project Constellation and completed a Preliminary Economic Assessment ("PEA") in early 2016.  The PEA contemplates sequential production from an open pit mine at Josemaría (Argentina) followed by a block cave, underground mine at Los Helados (Chile). The two deposits are located approximately 10 kilometres apart, and the PEA contemplated that material from both deposits would be processed at a centralized facility. 

Project Constellation is one potential development option, however, the acquisition of JOGMEC’s 40%  interest in the Josemaría project, which was completed in November 2017, provides the Company with additional development options.  In particular, studies are being considered for a stand-alone development option for the Josemaría project in Argentina focusing on a simple open pit scenario with a shallow, high-grade starter pit.

Information of a scientific or technical nature regarding Josemaria is derived from the National Instrument 43-101 technical report with an effective date of February 12, 2016, an amended signature date of March 31, 2016, and titled “Constellation Project incorporating the Los Helados Deposit, Chile and the Josemaría Deposit, Argentina NI 43-101 Technical Report on Preliminary Economic Assessment ”, which was prepared by Alfonso Ovalle, RM CMC; Cristian Quiñones, RM CMC; Cristian Quezada, RM CMC; David Frost, FAusIMM; and Vikram Khera, P.Eng., all of whom are with Amec Foster Wheeler International Ingeniería y Construcción Limitada;  and by Gino Zandonai, RM CMC, of DGCS SA (the “Project Constellation PEA”).  The Project Constellation PEA is available under the Corporation’s profile on SEDAR www.sedar.com.  The reader is cautioned that the information here is a summary only, which has been derived, in part, from the Project Constellation PEA and that certain sections have been updated.  To put the contents hereof in context, the reader should review the entire Project Constellation PEA, together with its illustrations, figures, footnotes, bibliography, etc. 

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